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From Black Friday to Cyber Week: Winter Holiday 2016 Ad Trends

Thanksgiving weekend once marked the true beginning of the Winter Holiday shopping season, with the starting bell rung by the infamous Black Friday sales. However, things are now a lot more complicated, as Thanksgiving itself has now emerged as an important shopping day, and with Cyber Monday, Cyber Week and even Small Business Saturday all competing with Black Friday for consumers’ attention, time and dollars. Yet the pressure on retailers to win remains intense: According to the NRF, more than 154 million consumers went shopping during Thanksgiving weekend this year, spending an average of $289.19 per person.

For retail advertisers, the new landscape provides a number of challenges – and opportunities. While retailers once focused on an all-out combat to get consumers to stores on one critical day, shopping behavior now appears to be spread out over more days, and is increasingly migrating to the web and mobile devices. And a proliferation of ads across numerous channels is making it harder than ever to break through the clutter– while also enabling retailers to target their most loyal shoppers with exclusive deals. In this report, Kantar Media examined retail advertising activity during the four weeks ending with Cyber Monday to see how brands are navigating these trends, with a special focus on events over the Thanksgiving weekend so we can better understand how advertising strategies are evolving, and what role Black Friday still plays today.

Retail ad spend off to a slow start

When looking at overall ad spend by retailers, 2016 seems to be off to a lackluster start. During the first four weeks of the winter holiday period extending through the Sunday of Thanksgiving week (October 31 – November 27, 2016), retail ad expenditures totaled $1.2 billion - down nine percent compared to 2015. Looking at major retail segments only two – home and building and food and drug - saw lift in comparison to the previous year.

Of course, this November included a heated election season, with significant ad spending on both the general and local elections in many states. Heavy volumes of political ads have been known to crowd out other advertisers in the past. However, these declines in retailer spend persisted throughout November, implying political advertising was not the cause.

Looking on a more granular level, we examined a select group of top retail advertisers and found the majority have been pulling back across the board. Indeed, only three of the 11 retailers examined had spending levels that exceeded those of the previous year. Best Buy in particular had a steep 50% drop in spend which was a major driver of the 34% decline seen in the electronics retailer category. This appeared to be due to diverting spend from comparatively costly TV campaigns to digital tactics.

So what’s behind the slow spend thus far in 2016? Consumers often express frustration with how soon the ad blitz begins and advertisers may simply be focusing their efforts for later in the season. Indeed, the growing tendency for consumers to spread shopping out beyond Black Friday and to buy more online may also be encouraging retailers to do more cost-effective digital campaigns earlier in the season, and save broader-based TV pitches to rally shoppers closer to the holiday. So despite the initial declines, it remains to be seen how much retailers will spend during Winter Holiday 2016.

Who won the Thanksgiving weekend?

Regardless of the approaches retailers are taking, the end goal remains the same – get consumers into their stores, onto their websites and spending money. Winning share of traffic from Black Friday to Cyber Monday is crucial, and in order to assess this we analyzed retailer activities across three different channels – paid TV, print, radio and digital display advertising; paid search advertising; and owned social activity.

Walmart wins in traditional and digital paid:

For traditional and display paid advertising, Walmart clearly spent the most, consistent with prior years. During the Black Friday to Cyber Monday time period, Walmart grabbed a 31% share of total spend from eight of the top retail advertisers. With so many locations all over the country, Walmart has to drive a lot of foot traffic, and spending big on mass media is definitely one way to help accomplish this goal.

Walmart, Amazon split Paid Search lead:

While TV may be one of the best tools for mass reach, paid search lets advertisers reach a highly targeted and motivated audience. Examining top 2500 retail product keywords from Black Friday through Cyber Monday this year, search intelligence expert AdGooroo, a Kantar Media company, found a significant shift in spend from text ads to product listing ads compared to the same period in 2015. Advertisers sponsoring these keywords spent $8.9 million on U.S. Google desktop text ads over the Black Friday-Cyber Monday weekend in 2016 vs. $15.4 million on text ads over the same period in 2015, and $9.6 million on U.S. Google desktop product listing ads vs. just $2.9 million on product listing ads in 2015. This shift may be due in part to changes this year in how Google displays ads, including dropping text ads on the right rail of search results pages while adding more product listing ad placements.

Top share honors were split across the two types of ads, with Amazon winning for text ad clicks with a 6.3% click share, while Walmart led for product listing ad clicks with an 8.1% click share. Amazon has avoided placing product listing ads for years and did not rank in this category.

No clear winner in social:

While paid tactics may work for some, other retailers rely more on owned media to get the message out to their already loyal fan bases. For social, frequency typically matters less than engagement. In an examination of Facebook, Twitter and Instagram from 11/23-11/28, Kohl’s, Best Buy and Target had the highest engagement on the three channels respectively according to social media intelligence company and Kantar Media partner Unmetric. (The engagement metric weights user interactions based on their importance. The weighted sum of interactions is then divided by the estimated number of brand fans or followers who received the content. This value is fit to an index scale of 0 to 1000 where a higher number indicates higher engagement.)

Twitter had the heaviest volume of posts from retailers, but with such a short shelf life for content on the channel, organic posts have to hit at the right moment in order to reach followers. Earlier this year however, Twitter added a new “while you were away” feature to highlight content for users. This algorithm may have helped lift engagement for Best Buy who only tweeted seven times, but had an engagement score of 44.5, higher than any other retailers who tweeted more often like Amazon. The online giant tweeted 271 times but only had an engagement score of 3.

Fewer retailers chose Facebook as their medium of choice, but those who did fared well. Retailers had much higher engagement here than on Twitter. Kohl’s won the channel with only two Facebook posts and an engagement score of 139.

Instagram had the lowest level of activity but the highest level of engagement, consistent with overall trends in social media. JC Penney only posted to the channel three times during the period analyzed but had an average engagement score of 351. For comparison, the retailer published 14 posted on Twitter, but only had an engagement score of 16.

Is Black Friday still a big deal?

With the increasing importance of Cyber Monday and the general extension of sales through Cyber Week, how important does Black Friday remain today? Based on Kantar Media’s analysis, while Black Friday certainly remains an important part of the holiday shopping conversation, retailers are now using a broader range of strategies.

First, it’s clear that leading retailers are, for the most part, using Black Friday messaging less frequently in their ads this year. Out of the 8 leading retailers in our study, only two – JC Penney and Sears – spent more on ads with Black Friday themes during the first four weeks of the holiday season this year. (Amazon, Best Buy and Kmart had comparatively little paid advertising on Black Friday themes and thus were not included in this analysis.) Black Friday-themed ads made up 53% of overall spend for the period for JC Penney, and 40% for Sears. Meanwhile, Walmart spent just 7% of its budget on Black Friday ads, while Target spent only 4% - significant declines from the share of ads devoted to this theme in 2015.

An early focus on Black Friday seemed to be an attempt for JC Penney, whose budget is a fraction of what Walmart and Target spend, to separate itself from the pack. The company began its Black Friday campaigns right after Halloween and 40% of its spend occurred by November 13; by comparison Target didn’t start heavily promoting Black Friday until Thanksgiving week.

Some of these retailers may also be doing more to promote Black Friday through other channels, and instead focusing on more general messages around savings in platforms like TV that reach a broad audience. Indeed, Best Buy, Kohl's, Target and Walmart led in paid search click share for Black Friday search keywords on Black Friday, even those these companies lagged otherwise in paid advertising spending on these themes.

Black Friday also remain a fairly popular topic on retailers’ social media channels over the Thanksgiving shopping weekend, although it clearly does not stand alone. Over this period, the leading retailers our partner Unmetric monitored posted Black Friday-related content 259 times, and Cyber Monday or Cyber Week content 216 times. Engagement scores did seem to be higher for Black Friday-related posts on Facebook and Instagram, while Cyber Monday resonated more with those on Twitter.

Based on our findings, this year winter holiday advertising appears to be in a time of transition – as is consumers’ shopping behavior. As shoppers buy during a wider range of times and places, retailers are trying different strategies to reach them, which may include advertising earlier to stay out of the fray; embracing broader “Cyber Week” promotions to maximize share of wallet; and using social, search, and other digital channels to supplement mass media campaigns with more targeted and timely messages. Kantar Media will continue monitoring this changing landscape over the weeks to come, so keep visiting kantarmedia.com to understand what’s happening during Winter Holiday 2016!